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# A stock has expected return of 12.0 percent, the risk free rate is 3.00 percent, and the market risk premium 4.00. a. What must be the stock beta?

A stock has expected return of 12.0 percent, the risk free rate is 3.00 percent, and the market risk premium 4.00.

a. What must be the stock beta?

b. What is the equity risk premium for the stock?

c. What is the return on market portfolio?

d. Draw the Security Market line: show the risk free rate, return on the stock and return on the market portfolio